MR. CROWLEY: Good afternoon, and welcome to the Department of State. This evening, Secretary Clinton will deliver remarks at the Commonwealth Club in San Francisco on innovation as an engine of America’s global leadership. She will affirm the Obama Administration’s commitment to fostering American innovation at home and promoting it abroad. The Secretary will discuss her 21st century statecraft agenda which leverages new tools and technologies to advance our nation’s interests and values around the world.

Turning to Europe, Ambassador Holbrooke today attended the third ministerial meeting of the Friends of Democratic Pakistan, which was hosted by the European Union High Representative Catherine Ashton and co-chaired by Pakistani Foreign Minister Qureshi. Also attending were the foreign ministers and senior representatives of 20 countries and four multilateral institutions. The Friends of Democratic Pakistan reviewed the international flood response effort and discussed the Government of Pakistan’s plans for post-flood recovery and reconstruction.

And coming up on Monday, Ambassador Holbrooke will participate in the meeting of the International Contact Group on Afghanistan and Pakistan, hosted by the Government of Italy and chaired by the German special representative. Senior Afghan and NATO officials will also participate. And this is an opportunity for the envoys to discuss the way forward on transition and receive an update on the Kabul process of reform launched at the Kabul conference in July.

The United States welcomes the decision by the Japanese oil company Inpex to withdraw from its investments in Iran. The company’s actions are part of a strong and emerging consensus not only of governments, but also from the private sector, and has come together to send a powerful and united signal to Iran that it should meet its international obligations and begin to engage seriously on its nuclear program. Inpex’s decision today, once again, underscores that there are risks in dealing with Iran. Inpex’s decision is consistent with the measures in UN Security Council Resolution 1929 and the Government of Japan’s recent sanctions on Iran, which, as Secretaries Clinton and Geithner stated last month, mark a significant step forward in the international community’s efforts to combat proliferation and prevent Iran’s development of nuclear weapons.

Deputy Secretary of State Steinberg announced on September 30th that four European energy companies – Eni, Statoil, Shell, and Total – have withdrawn from Iran. These actions now complemented by Inpex’s are further evidence that sanctions are having a major impact on Iran.

The United States remains committed to a diplomatic solution that resolves the international community’s concerns regarding Iran’s nuclear program. We will continue to work with our partners to pursue a dual-track strategy of engagement and pressure to achieve this objective.

QUESTION: Anything on Middle East peace process? The housing starts on 204 – 240 new houses for East Jerusalem.

MR. CROWLEY: Mm-hmm.

QUESTION: What impact do you think it will have on the peace process?

MR. CROWLEY: Well, we were disappointed by the announcement of new tenders in East Jerusalem yesterday. It is contrary to our efforts to resume direct negotiations between the parties. We will continue to work as we have to try to create conditions for direct negotiations to resume.

QUESTION: Were you informed ahead of time about their plans?

MR. CROWLEY: Yes.

QUESTION: And what did you tell them?

MR. CROWLEY: We told them just what I told you, that we felt this was contrary to what we were trying to do to get direct negotiations resumed.

QUESTION: An Israeli official has said that there is a tacit understanding between the U.S. and Israel regarding this issue.

MR. CROWLEY: The Government of Israel is well aware of our concerns about this.

QUESTION: The Arab League will ask the United Nations next month to recognize the Palestinian state. What’s your position toward such a step?

MR. CROWLEY: Well, we continue to promote direct negotiations as the best way to resolve the conflict and see the emergence of a Palestinian state that meets the aspirations of the Palestinian people and security and stability for Israel and the rest of the region. As we have said many, many times there are critical issues involved in this process. They need to be negotiated between the parties, and we oppose unilateral steps on either side.

QUESTION: How will you vote on such a resolution?

MR. CROWLEY: Pardon me?

QUESTION: How will you vote on such a resolution? Will you veto it or --

MR. CROWLEY: Well, Michel, we have our – we are doing what we think is the best way to end this conflict, and that is our position. As to how we will vote, obviously, that’s a hypothetical question.

QUESTION: Venezuela and Russia --

QUESTION: One final point on this. Saeb Erekat has asked the U.S. Administration to hold the Israeli Government responsible for the collapse of the negotiations in the peace process after the announcement of planning new buildings.

MR. CROWLEY: Look, let’s not get ahead of ourselves. We are working intensively as we speak with the parties directly to get negotiations to resume. We are doing everything in our power and we are making clear to the parties that we want to see this direct negotiation continue, so we’re not focused on what happens “if.” We’re focused on how can we create the conditions that allow the parties to continue. We believe it is in their interest to continue in this process, because otherwise there’s no other avenue to create the state that the Palestinians deserve and the security and stability that the Israelis deserve.

QUESTION: Senator Mitchell – is he still planning to go to the region?

MR. CROWLEY: We’re still evaluating what the appropriate next steps are. I’ve got nothing to announce.

Okay.

QUESTION: New topic?

MR. CROWLEY: Sure.

QUESTION: Venezuela and Russia – reaching an agreement to build the first nuclear plant in Venezuela, how is the U.S. responding?

MR. CROWLEY: Well, any new nuclear program or activity should be conducted in accordance with the highest standards of nonproliferation, safety, and security, including IAEA safeguards. So whatever happens with this announcement today – Venezuela and Russia have international obligations and we expect them to meet those obligations.

QUESTION: Have you been in touch with the Venezuelan Government to express your opinions or your position, or to find out what’s –

MR. CROWLEY: I’ll check, but I doubt it.

QUESTION: -- any details on that?

MR. CROWLEY: We don’t currently have an ambassador in Venezuela, as you know.

QUESTION: I have a follow-up on that one.

MR. CROWLEY: I’m sorry?

QUESTION: I have a follow-up on the Venezuela-Russia.

MR. CROWLEY: Okay.

QUESTION: Does it ring your bell the fact that it’s Venezuela? I mean, it’s not another country and Venezuela has been having a little bit of ties with Iran or – is there a little bit of concern on your part? Or –

MR. CROWLEY: Well, this is something that we will watch very closely. As we’ve said in the context of all countries that are signatories to the Nonproliferation Treaty, they have rights and they have responsibilities. It is certainly a right of any country to pursue civilian nuclear energy, but with that right comes responsibilities and we would expect Venezuela, Russia, or any other country pursuing this kind of technology to meet all international obligations.

QUESTION: Can I follow up – what about the cozy relationship between Medvedev and Chavez being that first there was weaponry and now a nuclear plant?

MR. CROWLEY: Countries are sovereign. They have the right to associate with whoever they wish. The relationship between Venezuela and Russia is not really of concern to us, but clearly, we want to make sure that for this particular civilian nuclear cooperation arrangement that all international obligations are met and that whatever results from this announcement is done in concert with the highest international standards, because the last thing we need to do is see technology migrate to countries or groups that should not have that technology.

QUESTION: Let’s put it the other way. Have you been in touch with Russia to talk about that?

MR. CROWLEY: Again, this announcement just occurred today. I don’t know that we’ve had any conversation.

QUESTION: But do you foresee that the U.S. could play any role – advisory role or –

MR. CROWLEY: Well, again, let me repeat. Countries have a inherent right to pursue civilian nuclear energy. That’s not an issue. The real issue is how do they do it, and – but we have confidence in Russia. In the context of Iran for example, it has made sure that cooperation that it has with Iran with respect to Bushehr has been done with full cooperation of the IAEA. And we would expect any arrangement that might go forward based on this announcement would meet international standards and ensure, and also full cooperation with the IAEA.

QUESTION: What –

QUESTION: Not only Iran, but we’re talking about China, Turkey – they’re entering talks with other nations, even the Czech Republic. So what is the new role for Russia as the Administration sees it?

MR. CROWLEY: But again, this is – this issue is not about Russia. It is about making sure that as civilian nuclear energy progresses around the world that countries fully cooperate with the IAEA and they meet the highest standards in terms of protections and safeguards to prevent proliferation. That’s why we support the IAEA and that’s why the international community come together to make a clear stand with respect to Iran because what Iran is doing is contrary to IAEA safeguards and contrary to its international obligations. But it’s why we also, at the same time, are willing to sit down with Iran and we – we’re obviously aware that Catherine Ashton has suggested a meeting date next month and we await Iran’s formal response.

We recognize that countries will pursue nuclear energy. It is within their right to do that. But how they do that does matter to make sure that we don’t see an already significant danger of proliferation expand even further.

QUESTION: The announcement has taken the U.S. by surprise? I mean, the Venezuelan announcement or –

MR. CROWLEY: This is an area that we’ve been watching for some time. I don’t think that this necessarily is a surprise to us.

QUESTION: Thank you. I’m asking – former President Carter is going to have a tour in Egypt and some Middle East countries. Any coordination between the State Department or the Administration with what he’s going to tackle there?

MR. CROWLEY: I – it wouldn’t surprise me if we are – that his office touched base with us before he travels, but he is a private citizen. He is free to travel to the region. He does so periodically. But I’m not aware there was any particular coordination that occurred.

QUESTION: Thank you.

QUESTION: Afghanistan?

MR. CROWLEY: Sure.

QUESTION: What is the source of your information on the ongoing peace talks? Do you have – because from Kabul the reports says that U.S. has embedded in the eyes and ears in the meetings that are going on.

MR. CROWLEY: I’m not sure about embedding of eyes and ears. There are contacts between the Afghan Government and the Taliban. As we have acknowledged, we are helping to facilitate those meetings. A variety of officials have commented on this. But this is an Afghan-led process and we are supporting them.

QUESTION: Yes, the question is: How you are facilitating that?

MR. CROWLEY: Well --

QUESTION: If you are not in touch with either side – with the Taliban, how are you --

MR. CROWLEY: Well, obviously, to travel through Afghanistan from point A to point B, it is best to coordinate with the Afghan Government and ISAF so everyone’s aware of what is happening, but I’m not going to go into great detail. But the facilitation really involves the movement of people to meeting locations and – but beyond that, we are just simply doing what the Afghan Government has asked us to do to promote this process. We are supporting this process, and we think it’s critical to resolving the conflict that is ongoing.

QUESTION: So are you saying that the U.S. – I presume the U.S. military is actually transporting (inaudible)?

MR. CROWLEY: I’m not saying that all. I’m just saying that --

QUESTION: What do you mean by moving people?

MR. CROWLEY: There is – we are coordinating with the Afghan Government to make so – because you need that kind of awareness to make sure that people can move from here to there for meetings. As to the specifics of how this is being done, I would defer to people at ISAF.

QUESTION: But just to be clear on that, so when you say you’re – that the U.S. is moving people, you mean that you’re – the facilitating of moving people is not the actual transporting of them as opposed to not --

MR. CROWLEY: I’m not ruling – again, I want – I will – the operational details of how this is occurring and the contacts between the Afghan Government and security forces on the ground, my understanding is that the facilitation involves logistics. I cannot tell you whether security forces are actually assisting in the transportation or just coordinating the transportation so that people can move to these meeting locations.

On the practical details of this, I’ll defer to ISAF.

QUESTION: Just to – just one follow up. So you are getting the information from Karzai government (inaudible). Do you have any other --

MR. CROWLEY: This is an Afghan-led process.

QUESTION: Where are you getting the information? From only Karzai government or any other sources?

MR. CROWLEY: I – what would all those other sources be? I’m trying to understand the question. Where’s – I mean, the reconciliation process is an Afghan-led process. We are coordinating with the Afghan Government in terms of helping to support this process. I’m not sure who else would be involved.

QUESTION: Same issue. How do you plan to achieve success in Afghanistan without involving Mullah Omar in the peace process since he’s the leader of the Taliban? Yesterday, you said you ruled out any talks in the --

MR. CROWLEY: Well, as I said yesterday, there are particular red lines, if you want to call it that, that we have agreed with the international community and Afghanistan. There’s no indication that we have that Mullah Omar has any intention of meeting the standards that we’ve laid out. So assuming to borrow Arshad’s phrase from yesterday that Mullah Omar has no intention of changing his stripes, then we’re talking about a – really an academic question. He has had many opportunities to disassociate himself with al-Qaida. Everything that we know suggests he still is closely affiliated with al-Qaida, and as such, would disqualify himself from any participation in this process or any involvement in the future of Afghanistan.

QUESTION: And secondly, the peace process that’s being led by the former president Burhanuddin Rabbani. He himself fought against the Taliban. What is the assessment of his leadership skills in this peace process?

MR. CROWLEY: We are supporting this process. It’s an Afghan-led process. And President Karzai has appointed members of the peace council. I think Ambassador Holbrooke has indicated now, now that we’ve got these – the structure in place and these individuals in place, we expect this process to accelerate.

QUESTION: He being a non-Pashtun, would that have an impact on the peace – he being a non-Pashtun, would that have an impact on the peace process – the success of the peace process?

MR. CROWLEY: Well, the future of Afghanistan is going to involve building a civil society that is – involves Pashtuns and other ethnic groups. So we certainly believe in a inclusive Afghanistan society, various groups that perhaps have been in the conflict in the past that can come together and join forces for the benefit of Afghanistan. That is the essence of the political process that is getting underway.

QUESTION: And one of the major reasons for the reconciliation effort of the foot soldiers not changing their sites is the reconciliation programs are very poorly funded; they don’t have enough money to fund those foot soldiers. Is there an effort to increase that part of the fund?

MR. CROWLEY: Well, again, from the London conference in January, the Kabul conference in July, the processes are now in place, the structure and people are in place, and we will work to support this in any way that we can. That was what Secretary Gates and Secretary Clinton made clear yesterday.

QUESTION: Have you assessed President Ahmadinejad’s visit to Lebanon and the statements that he made? And what’s your assessment?

MR. CROWLEY: What’s our assessment of President Ahmadinejad’s trip to Lebanon? Well, last month he made a trip to the United States and had some crazy things to say. And yesterday, he made a trip to Lebanon and again had some crazy things to say. He’s now back in Tehran where his country faces an increasingly bleak future and is further isolated from the international community as our announcement today underscores.

QUESTION: Why does his country face a bleak future? What’s –

MR. CROWLEY: Well, because we believe sanctions are increasing. We are enforcing 1929 country by country, and in the private sector, company by company are refusing to do business with Iran. It is having an impact on the ground and it is contrary to the best interests of the Iranian people who definitely want to have a different kind of relationship with the rest of the world. And that potential exists if Iran will meet its obligations and help us understand the nature of its nuclear program and convince the rest of the world that it does not have – is not intent on building a nuclear weapon. But as long as the international community feels that Iran is pursuing a nuclear weapon, then Iran can expect to have these sanctions continue to bite.

QUESTION: P.J. --

MR. CROWLEY: Hold on.

QUESTION: Are you satisfied with the Lebanese Government? They avoided any military agreement with Ahmadinejad.

MR. CROWLEY: We had expressed our concerns to the Lebanese Government that Iran might have had Hezbollah’s best intentions at heart, but certainly did not have the best intentions for all of the Lebanese people. I think that was clear yesterday by the tenor of Mr. Ahmadinejad’s trip to Lebanon.

QUESTION: When President Obama --

QUESTION: Still on Iran. I’m sorry, still on Iran. Do you have any feelings about Iran’s election to the presidency of OPEC (inaudible)?

MR. CROWLEY: I’m sorry, what?

QUESTION: Election to the presidency of OPEC. Iran – the oil minister of Iran was elected to --

MR. CROWLEY: I’ll see if we’ve got a view on that.

QUESTION: Okay.

QUESTION: P.J., you were talking about the sanctions --

MR. CROWLEY: Hold on, hold on. We’re still on Iran.

QUESTION: Yeah, I’m still on Iran.

MR. CROWLEY: Well, all right. Ladies first. (Laughter.)

QUESTION: Thank you. You were saying that you’ve heard that the sanctions are having an effect on Iran. We’re hearing from the private sector that they are being affected, the private sector businessmen, especially in the UAE. They’re saying it has affected them and, therefore, the people, and not necessarily the Revolutionary Guards and those that have been designated; whereas the U.S. has been saying that the intention is not to harm the general public.

MR. CROWLEY: That is our intention. And to the extent that we can, we are directing our efforts at entities that we think support the government and its policies. I don’t think that we can deny that there are ripple effects and that there are impacts that go beyond that. But obviously, we want to see a different relationship between Iran and the rest of the world. We want to see the Iranian people have the same opportunities to travel, to engage as others in the region and around the world have. And the only thing that’s impeding Iran from having that kind of relationship with the United States and the rest of the world is the government and policies of Iran. If they change their policies, if they meet their obligations then certainly, as we continue to offer the prospect of engagement and a different kind of relationship, that depends squarely on what Iran does and what policies it chooses to pursue.

QUESTION: So maybe it is hope that the government will change its course through pressure from the people within the country?

MR. CROWLEY: Well, it’s a fundamental obligation of any sovereign government to meet the needs of its people. And clearly, Iran’s current policies, its pursuit of nuclear technology – and we believe a nuclear weapon – is contrary to the long-term interest of its people.

QUESTION: When – during his campaign and after he took office, President Obama always said that he has a door of diplomacy open. Is that door shut on Iran or is it still open?

MR. CROWLEY: Well, not at all.

QUESTION: And what exactly you are expecting from Iran?

MR. CROWLEY: No, not at all. In fact, as was announced, Catherine Ashton of the EU has extended an invitation for Iran to meet next month in what we hope will be serious discussions on Iran’s nuclear program. We are awaiting Iran’s response. So we have a dual-track strategy. We’re going to continue to pursue pressure on the one hand, but the door has been open to Iran for some time, and really – literally, the ball is in Iran’s court. We hope they’ll respond to Catherine Ashton and hope we can begin a sustained dialogue with Iran.

QUESTION: You mentioned EU, so the NATO and EU both are urging U.S. to include Iran in Afghanistan. Are you going to openly go for it?

MR. CROWLEY: I’m not projecting that we’re going to have discussions with Iran on Afghanistan. Our interests – we have the same interest in a stable Afghanistan. The United States, the international community, and Iran have cooperated in the context of Afghanistan in the past. I believe in this meeting on Monday in Italy, Iran may well have its Afghan envoy there. I don’t project that we’re going to have any contact with him, but we recognize that Iran is a neighbor of Afghanistan, has an interest. And we would hope that Iran will play a more constructive role in Afghanistan than we’ve seen in the recent past.

QUESTION: Can we go back to Afghanistan peace process?

MR. CROWLEY: Sure.

QUESTION: What role do you see for Pakistan in this peace process?

MR. CROWLEY: Well, it’s an Afghan-led --

QUESTION: Yes.

MR. CROWLEY: -- process but we know it has been a topic of discussion between Afghanistan and Pakistan. And we would hope that Pakistan, like the international community, will support this process as well.

QUESTION: Is it because Ambassador Holbrooke has been repeatedly saying that there could be no solution to Afghanistan without involving Pakistan in the peace process?

MR. CROWLEY: Well, and at the strategic level, that’s exactly what we’ve done. In the President’s strategy, we are focusing significant attention not just on Afghanistan, but also on Pakistan because we do understand that the solution to the region rests on both sides of that border.

QUESTION: Do you think it will be helpful to have Pakistan on the table of the talks – for the talks?

MR. CROWLEY: Again, this is an Afghan-led process. We are supporting the Government of Afghanistan.

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